Poland: Manufacturing sector sees softer deterioration in March
The S&P Global Poland Manufacturing Purchasing Managers’ Index (PMI) rose to 48.0 in March from 47.9 in February. As a result, the index remained below the 50.0 no-change threshold, but signaled a softer deterioration in manufacturing sector operating conditions compared to the previous month.
March’s PMI data revealed a solid reduction in production volumes, primarily due to weak order books. This downturn in manufacturing activity was attributed to subdued demand both domestically and in key export markets, notably Germany and the Netherlands. However, some firms reported growth in non-EU markets. The lack of demand led to reduced operating capacity, allowing for a continued decline in backlogs of work. Despite these challenges, there were signs of more stable staff hiring patterns, with workforce numbers falling at a slower rate, partly due to recruitment for new product launches and business expansion plans.
Input prices saw a marginal increase in March, reflecting higher production costs passed on by suppliers. Despite rising costs, manufacturers accelerated the rate of price discounting to the fastest since October 2023, aiming to remain competitive. This strategy has led to sustained declines in factory gate charges for several months. Meanwhile, manufacturers’ business sentiment weakened, with confidence hitting its lowest point in 2024, driven by concerns over weak sales pipelines and the broader economic outlook.